What Boards should know about change and psychological risk
The recent SafeWork NSW intervention at the University of Technology Sydney (UTS) highlights an important truth – organisational change isn’t only about structure and roles; it carries potentially significant psychological health and safety risks that boards must take seriously.
When restructures are handled without adequate consultation, clarity or care, the risks go beyond reputational damage. They can directly impact staff wellbeing, create regulatory exposure and undermine the success of the change itself.
What Boards and Directors should take away
1. Difficult conversations are a governance issue – Boards need assurance that staff are engaged respectfully during change processes. The way difficult conversations are handled sets the tone for culture and trust.
2. Impacts extend beyond those losing roles – Remaining staff may face uncertainty, heavier workloads or anxiety about how work will get done with fewer people. Boards must recognize that everyone in the organisation can be affected by change.
3. Work design must be reviewed – Simply reducing headcount without revisiting how work is structured risks overburdening staff and compromising psychological safety. Ideally, Boards should encourage co-design, or at minimum, meaningful consultation, to ensure new structures are sustainable.
4. Consultation is not optional – Consultation with staff, health and safety representatives and unions isn’t just a compliance exercise. It’s key to minimising psychological risk and preserving trust through disruption.
Why this matters for Boards
Directors aren’t in the room for every change conversation, but they are accountable for oversight and are duty holders under work health and safety legislation. The UTS case is a reminder that Boards should be asking Leadership Teams questions, such as:
· How are psychological risks being assessed and mitigated?
· What supports are in place for both departing and remaining staff?
· Has work design been properly reviewed? How have ways of working changed to account for lower staff numbers?
· How meaningful is the consultation process?
Restructure and transformation may be unavoidable, but boards can and should influence how they are done. By keeping people at the centre of change, directors not only meet their governance obligations but also safeguard the long-term resilience and health of the organisation and its staff.
If your board is navigating change and would like to explore these considerations further, I’d be happy to share insights and support your discussions.